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Loans and Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
Loans and Allowance for Credit Losses Loans and Allowance for Credit Losses
Loans
Major classifications within the Company’s held for investment loan portfolio at December 31, 2024 and 2023 were as follows:
(dollars in thousands)20242023
Commercial, financial, and agricultural$202,329 $226,275 
Real estate construction − residential
32,046 58,347 
Real estate construction − commercial
80,435 130,296 
Real estate mortgage − residential
361,735 372,391 
Real estate mortgage − commercial
775,594 731,024 
Installment and other consumer14,021 20,814 
Total loans held for investment$1,466,160 $1,539,147 

The Bank grants real estate, commercial, installment, and other consumer loans to customers located within the Missouri communities surrounding Jefferson City, Columbia, Clinton, Warsaw, Springfield, and the greater Kansas City metropolitan area. As such, the Bank is susceptible to changes in the economic environment in these communities. The Bank does not have a concentration of credit in any one economic sector. Installment and other consumer loans consist primarily of the financing of vehicles. Accrued interest on loans totaled $6.5 million and $7.2 million at December 31, 2024 and 2023, respectively, and is included in the accrued interest receivable and other assets on the Company's consolidated balance sheets. The total amount of accrued interest is excluded from the amortized cost basis of loans presented above. Further, the Company has elected not to measure an allowance for credit losses for accrued interest receivable. At December 31, 2024, $746.3 million of loans were pledged to the FHLB as collateral for borrowings and letters of credit.
The following is a summary of loans to directors and executive officers or to entities in which such individuals had a beneficial interest of the Company:
(dollars in thousands)
Balance at December 31, 2023
$9,597 
New loans9,452 
Amounts collected(6,474)
Balance at December 31, 2024
$12,575 
Management believes such loans were made in the normal course of business on substantially the same terms, including interest rates and collateral requirements, as those prevailing at the same time for comparable transactions with other persons, and did not involve more than the normal risk of collectability or present unfavorable features.
Allowance for Credit Losses
The allowance for credit losses is measured using a lifetime expected loss model that incorporates relevant information about past events, including historical credit loss experience on loans with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics including borrower type, collateral type and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily large loans on non-accrual status, are evaluated on an individual basis. The allowance for credit losses is a valuation account that is deducted from loans amortized cost basis to present the net amount expected to be collected on the instrument. Expected recoveries are included in the allowance and do not exceed the
aggregate of amounts previously charged-off and expected to be charged-off. Loans are charged off against the allowance for credit losses when management believes the balance has become uncollectible.
Allowance for Credit Losses on Off-Balance-Sheet Credit Exposures
The Company maintains a separate allowance for credit losses for off-balance-sheet credit exposures, including unfunded loan commitments, unless the associated obligation is unconditionally cancellable by the Company. This allowance is included in other liabilities on the consolidated balance sheets with associated expense recognized as a component of the provision for credit losses on the consolidated statements of income. The liability for unfunded lending commitments utilizes the same model as the allowance for credit losses on loans, however, the liability for unfunded lending commitments incorporates an assumption for the portion of unfunded commitments that are expected to be funded.
Sensitivity in the Allowance for Credit Loss Model
The allowance for credit losses is an estimate that requires significant judgment including projections of the macroeconomic environment. The forecasted macroeconomic environment continuously changes, which can cause fluctuations in estimated expected losses.
The following table illustrates the changes in the allowance for credit losses by portfolio segment:
(dollars in thousands)Commercial,
Financial, &
Agricultural		 Real Estate
Construction -
Residential		 Real Estate
Construction -
Commercial		 Real Estate
Mortgage -
Residential		 Real Estate
Mortgage -
Commercial		 Installment
and other
Consumer		 Un-
allocated		 Total
Balance at, December 31, 20212,717 137 588 2,482 10,662 256 61 16,903 
Charge-offs(135)— — — (181)(321)— (637)
Recoveries56 — 22 45 11 88 — 222 
Provision for (release of) loan losses (1)97 20 265 802 (2,492)303 105 (900)
Balance at, December 31, 20222,735 157 875 3,329 8,000 326 166 15,588 
Adoption of ASU 2016-13$(649)$291 $2,894 $1,890 $1,613 $(80)$(166)$5,793 
Balance at January 1, 20232,086 448 3,769 5,219 9,613 246 — 21,381 
Charge-offs(161)— — (88)(32)(347)— (628)
Recoveries192 — 22 23 4 85 — 326 
Provision for (release of) credit losses1,091 595 (518)110 952 248 187 2,665 
Balance at, December 31, 20233,208 1,043 3,273 5,264 10,537 232 187 23,744 
Charge-offs$(2,238)$— $— $(51)$(437)$(265)$— $(2,991)
Recoveries118 — 27 13 — 108 — 266 
Provision for (release of) credit losses472 (465)(1,079)84 2,205 63 (255)1,025 
Balance at, December 31, 20241,560 578 2,221 5,310 12,305 138 (68)22,044 
(1) Beginning January 1, 2023, calculation is based on CECL methodology. Prior to January 1, 2023, calculation was based on probable incurred loss methodology.
Collateral-Dependent Loans
Collateral-dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. Under the CECL methodology, for collateral-dependent loans, the Company has adopted the practical expedient to measure the allowance on the fair value of collateral.
The allowance is calculated on an individual loan basis based on the shortfall between the fair value of the loan’s collateral, which is adjusted for liquidation costs/discounts, and the loan’s amortized cost. If the fair value of the collateral exceeds the loan’s amortized cost, no allowance is necessary. The Company’s policy is to obtain appraisals on any significant pieces of collateral. Higher discounts are applied in determining fair value for real estate collateral in industries that are undergoing significant stress, or for properties that are specialized use or have limited marketability.
The amortized cost of collateral-dependent loans by class as of December 31, 2024 and 2023 was as follows:
Collateral Type
(dollars in thousands)Real EstateOtherAllowance Allocated
December 31, 2024
Commercial, financial, and agricultural$— $766 $125 
Real estate construction − residential454 — 194 
Real estate mortgage − commercial65 — — 
Total$519 $766 $319 
December 31, 2023
Commercial, financial, and agricultural$— $2,221 $1,300 
Real estate construction − residential432 — 164 
Real estate mortgage − residential46 — 19 
Real estate mortgage − commercial2,369 — — 
Total$2,847 $2,221 $1,483 
Credit Quality
The Company categorizes loans into risk categories based upon an internal rating system reflecting management’s risk assessment. Risk ratings are assigned for each loan at the time of approval, and they change as circumstances dictate during the term of the loan.
•Pass - loans that are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell in a timely manner, of any underlying collateral.
•Watch - loans that have one or more weaknesses identified that may result in the borrower being unable to meet repayment terms or when the Company’s credit position could deteriorate at some future date.
•Special Mention - loans that have negative financial trends, or other weaknesses that if left uncorrected, could threaten its capacity to meet its debt obligations. This is a transitional grade that is closely monitored by management for improvement or deterioration.
•Substandard - loans that are inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Loans so classified may have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. Such loans are characterized by the distinct possibility that the Company may sustain some loss if the deficiencies are not corrected.
•Doubtful - loans that have all the weaknesses inherent in loans classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently known facts, conditions, and values. These loans are also on non-accrual status.
•Non-accrual - loans that are delinquent for 90 days or more and the ultimate collectability of interest or principal is no longer probable. Real estate loans secured by one-to-four family residential properties are exempt from these non-accrual guidelines. These loans are placed on non-accrual status after they become 120 days past due (The majority of the Company's non-accrual loans have a substandard risk grade.)
The following table presents the recorded investment by risk categories at December 31, 2024:
Term Loans
Amortized Cost Basis by Origination Year and Risk Grades
(dollars in thousands)20242023202220212020PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost BasisTotal
December 31, 2024
Commercial, Financial, & Agricultural
Pass$22,726 $21,302 $30,025 $25,338 $26,557 $3,932 $62,205 $1,531 $193,616 
Watch— 120 1,473 — — 262 504 — 2,359 
Special Mention— — — — 309 — 741 — 1,050 
Substandard— — 3,350 628 — — — 403 4,381 
Doubtful— — — — — — 79 — 79 
Non-accrual loans286 87 78 — 37 — 356 — 844 
Total$23,012 $21,509 $34,926 $25,966 $26,903 $4,194 $63,885 $1,934 $202,329 
Gross YTD charge-offs— 230 — 104 2 106 1,796 — 2,238 
Real Estate Construction - Residential
Pass$16,368 $13,808 $601 $617 $165 $— $— $33 $31,592 
Non-accrual loans454 — — — — — — — 454 
Total$16,822 $13,808 $601 $617 $165 $— $— $33 $32,046 
Gross YTD charge-offs— — — — — — — — — 
Real Estate Construction - Commercial
Pass$49,742 $7,057 $10,424 $3,828 $622 $564 $7,072 $— $79,309 
Watch911 124 13 — — — — — 1,048 
Substandard— 29 — — — — — — 29 
Non-accrual loans— — — — — 49 — — 49 
Total$50,653 $7,210 $10,437 $3,828 $622 $613 $7,072 $— $80,435 
Gross YTD charge-offs— — — — — — — — — 
Real Estate Mortgage - Residential
Pass$30,005 $46,795 $115,928 $49,519 $42,036 $23,440 $44,148 $1,543 $353,414 
Watch5,702 — 40 391 423 675 30 — 7,261 
Substandard— — — — — 98 — — 98 
Non-accrual loans— — 426 89 — 278 169 — 962 
Total$35,707 $46,795 $116,394 $49,999 $42,459 $24,491 $44,347 $1,543 $361,735 
Gross YTD charge-offs— — — — — 14 37 — 51 
Real Estate Mortgage - Commercial
Pass$56,648 $117,853 $212,698 $203,591 $69,342 $57,352 $14,815 $137 $732,436 
Watch2,298 51 4,763 1,961 — 184 — 581 9,838 
Special Mention27,271 — 5,679 — — — — — 32,950 
Substandard— — 231 — — — — — 231 
Non-accrual loans64 75 — — — — — — 139 
Total$86,281 $117,979 $223,371 $205,552 $69,342 $57,536 $14,815 $718 $775,594 
Gross YTD charge-offs— 340 — 65 — 32 — — 437 
Installment and other Consumer
Pass$2,188 $3,636 $3,591 $1,165 $554 $2,805 $72 $— $14,011 
Non-accrual loans— — — — — 10 — — 10 
Total$2,188 $3,636 $3,591 $1,165 $554 $2,815 $72 $— $14,021 
Gross YTD charge-offs10 11 9 3 1 230 1 — 265 
Total Portfolio
Pass$177,677 $210,451 $373,267 $284,058 $139,276 $88,093 $128,312 $3,244 $1,404,378 
Watch8,911 295 6,289 2,352 423 1,121 534 581 20,506 
Special Mention27,271 — 5,679 — 309 — 741 — 34,000 
Substandard— 29 3,581 628 — 98 — 403 4,739 
Doubtful— — — — — — 79 — 79 
Non-accrual loans804 162 504 89 37 337 525 — 2,458 
Total$214,663 $210,937 $389,320 $287,127 $140,045 $89,649 $130,191 $4,228 $1,466,160 
Total Gross YTD charge-offs$10 $581 $9 $172 $3 $382 $1,834 $— $2,991 
The following table presents the recorded investment by risk categories at December 31, 2023:
Term Loans
Amortized Cost Basis by Origination Year and Risk Grades
(dollars in thousands)20232022202120202019PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost BasisTotal
December 31, 2023
Commercial, Financial, & Agricultural
Pass$40,103 $43,082 $32,812 $30,965 $4,774 $5,022 $55,379 $213 $212,350 
Watch1 2,505 32 586 3 282 2,502 — 5,911 
Substandard371 3,758 19 16 — — 323 1,299 5,786 
Non-accrual loans159 96 317 — 7 — 1,649 — 2,228 
Total$40,634 $49,441 $33,180 $31,567 $4,784 $5,304 $59,853 $1,512 $226,275 
Gross YTD charge-offs— 1 — — — 160 — — 161 
Real Estate Construction - Residential
Pass$39,847 $17,259 $634 $175 $— $— $— $— $57,915 
Non-accrual loans432 — — — — — — — 432 
Total$40,279 $17,259 $634 $175 $— $— $— $— $58,347 
Gross YTD charge-offs— — — — — — — — — 
Real Estate Construction - Commercial
Pass$49,041 $53,058 $24,371 $1,040 $31 $735 $187 $— $128,463 
Watch934 17 — — — — 103 — 1,054 
Substandard710 — — — — — — — 710 
Non-accrual loans— — — — — 69 — — 69 
Total$50,685 $53,075 $24,371 $1,040 $31 $804 $290 $— $130,296 
Gross YTD charge-offs— — — — — — — — — 
Real Estate Mortgage - Residential
Pass$65,472 $121,430 $62,998 $47,884 $7,242 $19,193 $44,574 $202 $368,995 
Watch179 251 411 293 71 1,310 23 — 2,538 
Substandard16 — — 129 — 126 — — 271 
Non-accrual loans— 23 93 135 — 246 90 — 587 
Total$65,667 $121,704 $63,502 $48,441 $7,313 $20,875 $44,687 $202 $372,391 
Gross YTD charge-offs— — — 75 — — 13 — 88 
Real Estate Mortgage - Commercial
Pass$99,081 $208,699 $204,789 $84,363 $27,085 $39,941 $16,059 $659 $680,676 
Watch15,759 10,978 2,737 91 345 897 70 — 30,877 
Substandard— 215 15,944 — 45 289 — — 16,493 
Non-accrual loans1,817 54 712 212 83 — 100 — 2,978 
Total$116,657 $219,946 $224,182 $84,666 $27,558 $41,127 $16,229 $659 $731,024 
Gross YTD charge-offs— — — — — 32 — — 32 
Installment and other Consumer
Pass$7,430 $6,497 $2,720 $1,287 $987 $1,803 $90 $— $20,814 
Total$7,430 $6,497 $2,720 $1,287 $987 $1,803 $90 $— $20,814 
Gross YTD charge-offs84 23 7 — — 232 1 — 347 
Total Portfolio
Pass$300,974 $450,025 $328,324 $165,714 $40,119 $66,694 $116,289 $1,074 $1,469,213 
Watch16,873 13,751 3,180 970 419 2,489 2,698 — 40,380 
Substandard1,097 3,973 15,963 145 45 415 323 1,299 23,260 
Non-accrual loans2,408 173 1,122 347 90 315 1,839 — 6,294 
Total$321,352 $467,922 $348,589 $167,176 $40,673 $69,913 $121,149 $2,373 $1,539,147 
Total Gross YTD charge-offs$84 $24 $7 $75 $— $424 $14 $— $628 
Delinquent and Non-Accrual Loans
The delinquency status of loans is determined based on the contractual terms of the notes. Loans are generally classified as delinquent once payments become 30 days or more past due. The Company’s policy is to discontinue the accrual of interest income on any loan when, in the opinion of management, the ultimate collectability of interest or principal is no longer probable. In general, loans are placed on non-accrual status when they become 90 days or more past due. However, management considers many factors before placing a loan on non-accrual status, including the delinquency status of the loan, the overall financial condition of the borrower, the progress of management’s collection efforts and the value of the underlying collateral. Subsequent interest payments received on non-accrual loans are applied to principal if any doubt exists as to the collectability of such principal; otherwise, such receipts are recorded as interest income on a cash basis. Non-accrual loans are returned to accrual status when, in the opinion of management, the financial condition of the borrower indicates that the timely collectability of interest and principal is probable and the borrower demonstrates the ability to pay under the terms of the note through a sustained period of repayment performance, which is generally six months.
The following tables present the recorded investment in non-accrual loans and loans past due over 90 days still on accrual by class of loans as of December 31, 2024 and 2023.
(dollars in thousands)Non-accrual with no AllowanceNon-accrual with AllowanceTotal Non-accrual90 Days Past Due And Still AccruingTotal Non-performing Loans
December 31, 2024
Commercial, Financial, and Agricultural$— $923 $923 $— $923 
Real estate construction − residential— 454 454 — 454 
Real estate construction − commercial— 49 49 — 49 
Real estate mortgage − residential— 963 963 207 1,170 
Real estate mortgage − commercial— 138 138 — 138 
Installment and Other Consumer— 10 10 3 13 
Total$— $2,537 $2,537 $210 $2,747 
December 31, 2023
Commercial, Financial, and Agricultural$— $2,228 $2,228 $— $2,228 
Real estate construction − residential— 432 432 —432 
Real estate construction − commercial— 69 69 —69 
Real estate mortgage − residential— 587 587 115702 
Real estate mortgage − commercial2,368 610 2,978 —2,978 
Installment and Other Consumer— — — 4 4 
Total$2,368 $3,926 $6,294 $119 $6,413 
No material amount of interest income was recognized on non-accrual loans during the year ended December 31, 2024.
The following table provides aging information for the Company's past due and non-accrual loans at December 31, 2024 and 2023.
(dollars in thousands)Current or
Less Than
30 Days
Past Due		30 - 89 Days
Past Due		90 Days
Past Due
And Still
Accruing		Non-AccrualTotal
December 31, 2024
Commercial, Financial, and Agricultural$201,201 $205 $— $923 $202,329 
Real estate construction − residential31,592 — — 454 32,046 
Real estate construction − commercial80,386 — — 49 80,435 
Real estate mortgage − residential358,393 2,172 207 963 361,735 
Real estate mortgage − commercial773,918 1,538 — 138 775,594 
Installment and Other Consumer13,900 108 3 10 14,021 
Total$1,459,390 $4,023 $210 $2,537 $1,466,160 
December 31, 2023
Commercial, Financial, and Agricultural$223,845 $202 $— $2,228 $226,275 
Real estate construction − residential57,568 347 — 432 58,347 
Real estate construction − commercial130,227 — — 69 130,296 
Real estate mortgage − residential368,956 2,733 115 587 372,391 
Real estate mortgage − commercial728,029 17 — 2,978 731,024 
Installment and Other Consumer20,607 203 4 — 20,814 
Total$1,529,232 $3,502 $119 $6,294 $1,539,147 
Loan Modifications for Borrowers Experiencing Financial Difficulty
In the normal course of business, the Company may execute loan modifications with borrowers. These modifications are analyzed to determine whether the modification is considered concessionary, long-term and made to a borrower experiencing financial difficulty. The Company’s modifications generally include interest rate adjustments, principal reductions, and amortization and maturity date extensions. If a loan modification is determined to be made to a borrower experiencing financial difficulty, the loan is considered collateral-dependent and evaluated as part of the allowance for credit losses as described above in the Allowance for Credit Losses section of this note.

For the year ended December 31, 2024, the Company did not modify any loans made to borrowers experiencing financial difficulty. The Company monitors loan payments on an on-going basis to determine if a loan is considered to have a payment default. Determination of payment default involves analyzing the economic conditions that exist for each customer and their ability to generate positive cash flows during the loan term.
Loans Held For Sale
The Company designates certain long-term fixed rate personal real estate loans as held for sale. Prior to September 30, 2024, these loans were initially measured at fair value under the fair value option election with subsequent changes in fair value recognized in mortgage banking income. As of September 30, 2024, loans held for sale are being carried at the lower of cost or estimated fair value. The loans are primarily sold to Freddie Mac, Fannie Mae, PennyMac, and various other secondary market investors. The Company sells loans with servicing retained or released depending on pricing and market conditions. There were no mortgage loans held for sale at December 31, 2024 compared to $3.9 million at December 31, 2023.